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Further and Higher Education (Employer Engagement)

: My hon. Friend is right. Improving apprenticeship completion rates is a key priority for us. We have improved; we have reached a level of about 40 per cent. However, if we compare that with evidence of practice elsewhere in the European Union, we see that we have a lot further to go. We must prioritise that. Recently, I hosted an event in my constituency promoting apprenticeships. One of the companies actively engaged on the issue gave a presentation in which the managing director described how he tells his line managers, ““Take these people on and, after six months, make a judgment about whether or not they can succeed.If you get them through the apprenticeship and then say that they cannot carry on to full employment, you, the line manager, have a problem.”” That is the right way for companies to engage on the issue. They should not seek a short-term, quick fix, but see apprentices as a route whereby people are brought in, and companies mould their own people and develop their potential for the benefit of the organisation. We are strengthening the role of employers in sector skills councils by encouraging them to transform the interface between employers and education and training, through informing demand at national, regional and local levels, and creating a truly demand-led system at every level. That is the right way forward. Of course, we must ensure the effective delivery of all that we have in hand. That will require a strong, combined effort by all who are part of the skills alliance partnership—both skills demand and supply will be involved—at national, regional and local levels. We need a vision that takes us beyond our immediate delivery objectives. The high level of work force skills capability that we will need to compete effectively in world markets in 2020 and beyond will require a fundamental step change in our attitudes to skills. If we look at the best examples of what is already being achieved by partners, we can see what could form the foundation of that vision. The benefits will accrue for everyone—employers, individuals and society—which means that everyone has a stake in making that transformation. There is an important role for Government: to create the infrastructure and environment and to tackle the areas of market failure. Employers and individuals will also have to play their part by participating and contributing to the costs. The oft-quoted figure is that employers spend about £23 billion a year on training. Speaking bluntly, that needs to be increased. That was made clear in our skills strategy White Paper and it has been confirmed in the Leitch review. We are shifting on the issue. For donkey's years, we have heard employers say that the education and training system does not fulfil their demands. We are now moving to change that situation. We are putting the needs of employers centre stage, and, to put it crudely, it is put up or shut up time for employers. They must engage in the process and help us to make things a reality. I strongly sense that the vast majority of them want to do that. I am not neglecting the role of the Government for a minute. They continue to invest on a massive scale in supporting employers to achieve the best results. In 2005–06, the Learning and Skills Council spent £7.6 billion, excluding school sixth forms. Employers should accept shared responsibility for developing the skills of their work force, commensurate with the benefits that they receive for funding the higher level skills and qualifications that bring more substantial financial rewards—increased productivity and profitability for employers, and increased wages for individuals. We will need to rebalance the contributions between employers, individuals and the state. It is therefore important to set clear priorities for public spending. Even though we have increased public funding significantly from the levels that we inherited from the previous Government, it will still be finite and needs to be prioritised. That is the right thing to do. In that real sense, we need a cultural change about who pays and who makes a contribution. The international comparisons about what the individual and the business contribute towards education and training show that the UK lags significantly far behind. We need a transformation in such areas. On the role of higher education institutions in local and regional economic development, universities are now major players in their local economies. I recently visited Leeds university, which has an annual budget of £170 million, 30,000 students and several thousand employees. The idea that an organisation such as that is not a major player in the local economy is nonsense. It is welcome that universities increasingly see their role as that of key players in the local economy—Leeds university certainly does. That should develop and go further. Higher education institutions are, and should be, involved in regional skills partnerships and regional development agencies in developing the city agenda. The days of a university sitting in, but apart from, the local community are going and will very much be long gone. There is also a key role for further education colleges. In my experience, FE colleges are already strongly embedded in local economic community decision making. The principal of Harlow college chairs the local strategic partnership. The FE college is much engaged in the local community in a series of decisions, including economic regeneration. The experience of my college in Harlow is far from unique. It is becoming the practice and model throughout the country. Overall, we are seeing a change in further and higher education institutions. They are becoming more involved in business, economic development and community planning. I believe fundamentally that that is a force for good. It is a development that the Government strongly support.